What should I do if a product is not profitable?

A product becomes not profitable when its COGS and its share of the expenses are higher than its revenue. You may still want to keep the product (it is called a lost leader) because its presence could attract customers to purchase more profitable products, but as a general rule you would want to “fix” this problem in one of the following ways:

  • Increase its price. On the menu, select assumptions/revenues/pricing.
  • Decrease its COGS. You can do this by finding ways to lower the cost to you of raw materials (On the menu, select assumptions/costs/raw materials) or by using fewer raw materials in each product (On the menu, select assumptions/costs/cost of goods sold).
  • Increase its volume. On the menu, select assumptions/revenues/sales models.

Related Questions:

How do I choose prices?

How do I change the price for a product?

How can I lower COGS?

How do I change the number of units that I expect to sell?

What does it mean to cover your fixed costs?

How do I relate raw materials to products I sell?

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